Currently, user-generated videos have the lion’s share of Web traffic. P2P sites have run into a series of legal issues and Web TV hasn’t quite figured out its place online yet. But the big question is, will that always be the case? Things like profitability and growth play a big part in determining which will steal the top spot in the way of long-term popularity.

Here are my predictions:

1. User generated video from sites like YouTube, Revver and Qik will continue to be the most popular.
2. Web TV will not overtake user-generated video as the most popular online video content, but will gain some traffic share. However, Web TV sites will maintain the greatest ability to generate advertising revnue for the next several years.
3. In terms of video, P2P is on its way out. Movie and television producers are realizing the benefit of making full-length content available online and collecting ad revenue, which cuts down on copyright infringement – making P2P downloads obsolete.

Ad firms and traditional film producers are more comfortable with the TV and movie formats, so logic says they will continue to choose the more predictable Hulu for placement over the less familiar UGC sites. In addition, YouTube just cannot find a business model that works. Valleywag has a great post that summarizes the issue.

In addition, user-generated video sites just don’t work the way that Hulu does. Nalts over at Willvideoforfood posted about why professional grade videos seem to flop on YouTube. I’d suggest reading Nalts’ post, but here’s the summary – YouTube and similar sites are built around community. You can’t just post a video, no matter how great it is, and expect users to pick it up and share it. Networks, loyal fans and community “cred” are the currency of UGC.

It’s this sense of community between millions of viewers that will keep YouTube and other video sharing sites on top of the popularity contest for the foreseeable future – despite their inability to make as much money as TV-turned-Web gurus.

Noonan and Murphy were caught on tape and off air talking about Palin as McCain’s VP choice. Suffice to say, they are not impressed. Noonan stated that the party is using “political bullshit about narratives” to try to tell a positive story about the GOP. Murphy thinks the VP pick is “gimmicky.”

Theoretically, the media is unbiased and impartial. Their job is not to pick one side of a debate, but to present the information to their viewers in a fair and factually-based way.

However, when the media steps out from behind that curtain and show viewers what they really think, it can have a big impact on how people view a situation. They think they’re getting a “behind the scenes” glimpse of how things really are – especially when it comes to politics.

What does it say to voters when the party commentators we trust to get our news about the republican party are caught airing their true feelings about the inevitable crash and burn of the 2008 election? My husband is a die hard conservative and even he was rattled by Noonan and Murphy’s comments.

But here’s the meat of it – this would have been a non-story were it not for video sharing networks. We never would have heard the true feelings displayed here and nobody ever would have known about this at all. Noonan herself acknowledges the power of online video in a piece she wrote on the Wall Street Journal’s site yesterday to defend herself and her comments:

We were speaking informally, with some passion — and into live mics. An audio tape of that conversation was sent, how or by whom I don’t know, onto the internet. And within three hours I was receiving it from friends far and wide, asking me why I thought the McCain campaign is “over”, as it says in the transcript of the conversation.

According to this, it took only three hours for the video to come back to bite her. That’s pretty amazing.

This morning (September 4th) it was the second most watched YouTube video of the day and has more than 728,000 views over the last 24 hours.

Noonan and Murphy on Palin - Most Watched YouTube Video

Here’s the bad: NBC launched NBCOlympics.com, which promised live and on demand coverage of Olympic events to online viewers. It was a big investment and could have been the go-to place for Olympic videos. Unfortunately, at least according to preliminary numbers from eMarketer, the company took in $5.75 million from video ads – only 1.1% of annual video ad projections.

The obvious question here is, why so little? A strict delivery deal with Microsoft is most likely the culprit. Users were unable to share and repost videos on multiple sites, which severely stunted viewership. Also, the videos required a Silverlight plugin, which many were forced to download to be able to watch any of the videos on the site. Inability to share + forced additional downloads = some seriously turned off viewers.

On the flip side, the good news is this case study shows that online video can work together with the regular old TV. NBC’s numbers showed that 50 percent of those that watched Olympic videos on TV used online video to catch up on events they had missed. A total of 40 percent just wanted to watch something again they had seen on TV. Only 0.2 percent exclusively used the Internet to watch the Olympics.

According to Alan Surtzel, NBC’s president of research, “The Internet hardly cannibalizes; it actually fuels interest.” 

Fortunately for video fans, a U.S. District Court Judge in San Jose has ruled in favor of video distribution site Veoh in a case brought by “content” producer Io Group (Word to the wise – don’t Google Io Group at work). The Io Group decided to sue Veoh in 2006 after several of the company’s video content appeared on Veoh’s site.

The outcome of the ruling stated that Veoh was not liable for copyright violations because it is protected under the Digital Millennium Copyright Act. The DCMA basically states that content sharing sites cannot held liable if they take steps to filter copyrighted material and quickly remove any copyrighted content that sneaks in if the owners complain. Napster was not protected under the DMCA because, at least according to the courts, they existed solely to pirate and distributed copyrighted materials. On the other hand, sites like Veoh cater to original video content and network placement.

At least where I work, copyright laws are always a consideration – especially when helping a client navigate social media and content sharing. Here are the general takeaways I got from the Veoh case:

• Can you prove that your site or content sharing platform does not cater to copyrighted material?
• Take measures to prevent copyright infringement – includes fingerprinting software and monitorin
• Quickly remove any copyrighted content you find
• As the owners of the site, do not upload copyrighted material (though it’s forgivable if your users do as long as you remove it once you notice)

YouTube Top Ten in News & Politics

1. Joe Biden on Barack Obama
2. Angel Valodia Matos Kicks Olympic Referee in the Face
3. Anti-War Protesters Menace Intrepid Fox News Reporter!
4. Michelle Obama at the 2008 DNC
5. Debra – former Hillary supporter turned McCain fan
6. Tskinval wounds
7. Hillary Clinton: “No Way, No How, No McCain”
8. The One II: Road To Denver
9. “Seven” – TV Ad
10. Passed Over

So what does this tell us? First, it tells us that a number of YouTube viewers are following the DNC and commenting on campaign ads.

Then take a look at #2 – an Olympic referee got kicked in the face?? I didn’t hear anything about that in the news at all! This is one reason why online video is so great. You can find stories that the mainstream media doesn’t think is worth telling.

Speaking of things the mainstream media won’t share, check out #6 on the list. I’ll warn you now, it’s a bit graphic and spoken in Russian with English subtitles. Its a Russian-filmed documentary of Georgian aggression in Tskhinval. Media coverage has portrayed Russia as the militant and stubborn antagonizers. This video tells a very different story – one that I definitely haven’t seen on CNN or Fox. Is it true? There’s no real way to tell, and my intention is not to spark a political debate here. But YouTube is acting as a valuable vehicle for opposing points of view.

So maybe we have it wrong. Perhaps online video won’t replace TV after all. Maybe TV will actually become online video. Wow…that’s deep.

I’ve had some colleagues tell me this would be completely useless. I completely disagree. Having the weather or traffic or school closings sitting at the bottom of my TV screen while I’m watching the news means I control what information I receive and when – not my favorite news anchors. That’s what online communications is all about – a transfer of power from the mass media to the individual.

Instant videos shared with the world opens up an infinite numbers of both opportunities and challenges. While live video can be used to can immediately share events and experiences, governments, companies and even individuals are losing control over what is seen and what is not.